Appeal from St. Louis Circuit Court; Robert J. Kirkwood, Judge.
"Not to be published in State Reports".
Action by A. G. Blanke against C. F. Blanke Tea & Coffee Company, a corporation, and others, wherein Chilton Atkinson was appointed receiver to succeed C. F. Blanke and another as receivers of corporation, and wherein Fred C. Blanke filed a claim for merchandise delivered to receivers which claim on his death was revived by his executor, A. G. Blanke. From a disallowance of the claim, the executor appeals.
Affirmed.
SUTTON, Commissioner.
On July 27, 1932, in an action, commenced by A. G. Blanke as plaintiff against C. F. Blanke Tea and Coffee Company, a corporation, C. F. Blanke, and R. H. Blanke, as defendants, in the circuit court of the City of St. Louis, C. F. Blanke and Leo F. Laughren were appointed receivers of C. F. Blanke Tea and Coffee Company, a corporation, and were authorized to continue the operation of the business of said corporation.
The court in its decree appointing said receivers ordered and directed, inter alia, as follows: "The receivers are directed to immediately take possession of all property, assets, books and records of the C. F. Blanke Tea and Coffee Company, and to operate, manage and conduct the business of the said C. F. Blanke Tea and Coffee Company in such manner as the receivers in their judgment may deem best, and they are authorized to incur such expenditures and to make such payments and disbursements as may be needful and proper in so doing. The receivers are also authorized and directed to employ such managers and necessary agents, servants and employees required for the proper operation of said business and to enter into such contracts for advertising, purchasing of supplies and materials, and to contract from time to time for the purpose of such items of inventory as may be needful in the carrying on of said business."
On April 3, 1935, said C. F. Blanke and Leo F. Laughren resigned as receivers, and Chilton Atkinson was thereafter appointed successor receiver.
On June 24, 1935, Fred C. Blanke filed with the court in said cause a petition for the allowance, as an administrative claim, against the receivership estate, of $7,486.48, as the purchase price of certain merchandise
more particularly described as green coffee, alleged to have been sold and delivered to said receivers, C. F. Blanke and Leo F. Laughren, during a period commencing December 17, 1934, and ending April 2, 1935.
Thereafter, by order of the court, Fred C. Blanke having died, in the early part of December, 1935, his claim was revived in the name of A. G. Blanke as executor of his will.
The trial resulted in a disallowance of the claim. The executor appeals.
From and after their appointment on July 27, 1932, the receivers, C. F. Blanke and Leo F. Laughren, conducted the business of C. F. Blanke Tea and Coffee Company until their resignation on April 3, 1935.
Fred C. Blanke was a brother of Richard H. Blanke and A. G. Blanke. Richard H. Blanke was prior to the appointment of the receivers secretary-treasurer of the C. F. Blanke Tea and Coffee Company. Upon the appointment of the receivers Richard H. Blanke was employed by the receivers, and he continued to perform the same duties as he had performed prior to the receivership. He had charge of the credit department and was in charge of the books and records of the receivership. Fred C. Blanke was employed as contact man by the receivers and looked after the collections. Prior to the receivership he was assistant to the secretary-treasurer.
Richard H. Blanke testified as follows:
"Commencing on January 15, 1934, Fred C. Blanke engaged in a series of transactions of purchasing coffee from and selling coffee to the receivers. The coffee was bought by the C. F. Blanke Tea and Coffee Company from importers in New York and New Orleans, and was shipped in storage subject to delivery for cash, and as we would withdraw it Fred would buy it from us and pay for it. The coffee so withdrawn and paid for by Fred was then put in storage in the basement of the building occupied by the C. F. Blanke Tea and Coffee Company under his name and title, and as the company would withdraw it we would give him a record and cash for it. We were then buying it back from him. He would buy the coffee from the company at the same price we paid the importers for it. Then we would buy it back from him at the same price. Fred was not exactly acting as a straw man for the company. At the end of the month Fred received what we called brokerage for the amount that he had sold us. The brokerage was one quarter of a cent per pound. At the time that these transactions commenced the financial condition of the receivership estate was such that we were unable to buy goods from the importers on credit, and had to pay cash, so that brother induced brother Fred to buy the coffee and we buy it back from him as we could afford to pay for it. Fred did not pay the importer. He paid the tea and coffee company. When a bill for coffee came in it was consigned to the company at St. Louis, and the invoice would be with the bill of lading, and Fred would give us then a check for that amount, and then the company would draw a check and send it to the importer. Then the coffee was delivered to Fred and he would take it to his own warehouse. Then when the company needed this coffee we would withdraw it from his stock. It was practically the receiver that withdrew it. The receiver practically had a key to the warehouse. He went down there and took what he wanted, and then charged the company accordingly for it, or gave credit to Fred on the books of the company for the amount taken. After the coffee was delivered to Fred and placed in the warehouse in his name the receiver would withdraw coffee from the coffee that was sold to Fred. The receiver would withdraw coffee in small amounts just as the business required. He would not withdraw it in the same amounts he sold it, but in smaller amounts, just as the business required. The general practice was to pay for the coffee on the following day.
"Prior to the time the receivers sold the coffee to Fred it was stored in public warehouses. It could be withdrawn from these warehouses only by cash payments and the required cash could be obtained only by reselling to Fred and getting his check. The coffee was bought by the bankrupt concern in its name, then it was turned over to Fred for a check, which he gave to the receivers immediately, and the receivers would put that check in their banking account. When the coffee came in Fred gave the company a check for whatever the amount was.
"When coffee was taken from the warehouses where it...
